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Cross-border restructuring tips for US bankruptcy attorneys
Episode 320th May 2020 • R&I over Wi-Fi • Harneys
00:00:00 00:10:13

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Our third episode is hosted by Jayson Wood and Jessica Williams, Partners in our Litigation and Insolvency practice group.

Key takeaways:

  • The appointment of restructuring provisional liquidators in the Cayman Islands provides protection for a Cayman Islands company while a restructuring is negotiated in the US (and triggers a Cayman statutory moratorium).
  • The gateway for the appointment of restructuring provisional liquidators is: (i) that the company is unable to pay its debts; and (ii) that it intends to present a compromise or arrangement to its creditors. 
  • The Cayman Islands has not adopted the UNCITRAL Model Law. US Bankruptcy practitioners will therefore consider if steps should be taken in Cayman, through a parallel restructuring, to protect the effectiveness of the Chapter 11 plan (and taking into account the Gibbs rule).
  • The decision will largely come down to risk appetite (rather than costs), with parallel restructurings in the country of the law of the debt and the place of incorporation providing maximum effectiveness and recognition to the restructuring.